POLITICS
02/02/2017 08:55 pm ET Updated Feb 03, 2017

How The Fast-Food Chain Led By Trump's Labor Nominee Stiffed Workers Again And Again

While Andy Puzder ran Hardee's, its franchisees altered timecards, deducted pay for uniforms and even broke child labor law.

Al Seib/Los Angeles Times via Getty Images
Fast-food mogul Andy Puzder has been nominated to enforce the nation's labor laws.
  • Managers at a Hardee’s restaurant in Alabama scrubbed workers’ hours from the logbooks in order to avoid paying them overtime.

  • Hardee’s workers in Pennsylvania were required to pay 10 cents per hour for the privilege of wearing a Hardee’s uniform.

  • Workers at a Georgia Hardee’s were told to clock out and sit in the parking lot when business slowed down. When it picked up again, they were told to clock back in and work.

  • Managers at a Hardee’s in Missouri had money deducted from their paychecks whenever the cash register came up short.

  • Adult workers at a Hardee’s restaurant in Iowa were paid a “sub-minimum wage” that was legal only for minors, while minors worked so late that their hours broke child labor law.

In each of those cases, Labor Department investigators found that Hardee’s restaurants had violated federal wage-and-hour regulations and workers were entitled to thousands of dollars in backpay. Throughout this time, the Hardee’s brand has been overseen by Andrew Puzder, President Donald Trump’s nominee to be the next labor secretary.

If he is confirmed by the Senate, Puzder would be responsible for enforcing the same worker protections that his company and its franchisees were caught violating, sometimes repeatedly.

Puzder’s nomination to head the Labor Department has galvanized Democrats and workplace watchdogs, who say his record at Hardee’s and his past statements about workers should disqualify him from the job.

Conservatives and business groups have rallied to his defense. They argue that any Hardee’s violations need to be put in context. There were roughly 2,000 Hardee’s locations as of 2012, and the restaurants highlighted in this story represent a small fraction of them.  

The types of wage violations committed by these Hardee’s restaurants are endemic to the fast-food industry at large. All the big chains operate on a similar business model, and their franchisees run afoul of the same laws.

Wage theft is so prevalent in the fast-food industry that the Labor Department developed a targeted enforcement program to crack down on that one sector. During the 2016 fiscal year alone, the Labor Department found violations in 86 percent of fast-food cases investigated, with 10,300 workers owed more than $5.4 million, according to a department spokesman. President Barack Obama’s labor officials attributed the industry’s problems in part to a franchise model that blurs accountability.

Puzder has been a public booster of that model.

With one exception, all the Hardee’s wage theft cases reviewed by HuffPost involved restaurants that were run by franchisees, rather than by Puzder’s company, CKE Restaurants, which also owns the Carl’s Jr. brand. The franchise model allows companies like CKE to outsource restaurant operations ― and certain liabilities ― while retaining a portion of the profits.

Hardee’s workers in Pennsylvania were required to pay 10 cents per hour for the privilege of wearing a Hardee’s uniform.

But all the employees shorted on pay were working under the Hardee’s banner, to the benefit of Hardee’s and CKE, regardless of who was signing the paychecks. As a group of Labor Department officials explain in a petition on Puzder’s nomination that is now circulating, “our experience as the guardians of our nation’s employment laws has taught us that such violations often occur as the result of incentives or practices created by the franchisor.” That would be CKE.

A Hardee’s spokeswoman didn’t respond to questions about how CKE monitors its franchisees’ labor practices, particularly those of repeat violators of the law. The details in this story come from documents on wage theft investigations that The Huffington Post obtained through a public records request.

A common thread through many cases was how managers felt pressured to keep costs down and cut corners, driving them to stiff low-wage workers on pay. Some Hardee’s locations did not want to pay workers at all when the restaurants were not busy.

In a Tennessee case, managers had workers clock out late in the day when restaurant traffic would drop off, even though they had to continue serving the customers who did come in. This led to employees doing unpaid, off-the-clock work for periods of 30 minutes to three hours. “They are required to punch out to bring down labor costs,” the federal investigator wrote.

Sometimes, the workers were also forced to take an unscheduled lunch or break when not many customers were around. According to the investigator, the owner of the Hardee’s restaurant saw nothing wrong with the practice. “He stated that an employer could send their workers on as many breaks as they wanted,” the investigator wrote.

The franchisee agreed to pay a total of $7,600 in back wages to 29 workers.

A Hardee’s franchise in Georgia shaved labor costs in a similar manner. “Some employees indicated in their interview that managers send them out to the parking lot when the restaurant is not busy and ask them back in when it gets busy,” the investigator wrote. The off-the-clock work and other pay deductions ended up violating both minimum wage and overtime protections.

That franchisee agreed to pay $12,000 to an undisclosed number of employees.

In an Alabama case, a Hardee’s manager had an added incentive to make workers’ hours disappear. As an investigator put it, “this manager shaved hours for all employees in order to receive bonuses.” (Retail and food managers sometimes receive extra pay for hitting payroll targets.) The Labor Department found that 64 employees were shorted on pay when the manager fudged their timecards.

Including other violations, that franchisee agreed to pay $16,000 to the 64 workers.

In a Michigan case, a franchisee who owned two Hardee’s outlets avoided paying workers overtime by compensating them separately for their time at each restaurant. In a single week, for instance, one employee logged 40 hours at one store and 17 at the other. Under the law, she should have received time-and-a-half pay for the extra 17 hours, since all her work was for the same employer. Instead, she was paid “straight time” for it all.

The investigator determined the workers were owed $4,900 in back wages for the lost overtime pay. 

Some Hardee’s locations did not want to pay workers at all when the restaurants were not busy.

In other cases, Hardee’s locations violated the law when they deducted money from workers’ pay for the uniforms they wore.

At a Pennsylvania restaurant, the company took out 10 cents for every hour an employee worked in order to cover the cost of providing Hardee’s clothing. Because of the deduction, workers did not receive their full federally mandated time-and-a-half pay when they labored overtime.

The franchisee agreed to hand over more than $2,000 in back pay.

At an Iowa restaurant, workers ponied up $9.80 for red polo shirts with a Hardee’s logo on them. This violated the law because it pushed some workers’ pay below the minimum wage. The franchisee had been reprimanded for the same exact practice five years earlier, the investigator noted.

“He said that his understanding was that the cost of a uniform could not be deducted from the paycheck, but that it was not a violation if the employee paid cash for the required uniform,” the investigator wrote.

The franchisee also broke the law by paying workers a “sub-minimum wage.” It was legal to compensate minors at such a rate in certain circumstances in Iowa, the investigator noted, but some of the people being paid the reduced wage at this Hardee’s were well into their twenties. The franchisee also had a practice of purging workers’ hours from the computer system after paying them.

This franchisee, which employed 12 workers under the age of 16, was cited for 17 child labor violations, many of them for how late the kids were toiling away. One 15-year-old girl told the investigator that she worked as late as 1 a.m. some shifts. The company was cited for $4,000 in back wages and another $14,000 in civil penalties.

But the franchisee ended up selling its Hardee’s locations shortly after the investigation and shut down its operations. According to records, neither the back wages nor the civil penalties were ever paid.

HuffPost readers: Do you work for CKE or a Hardee’s/Carl’s Jr. franchise? Email us about it.

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